Foreclosure May Be An Opportunity For You
According to YourDictionary.com the definition of foreclosure is "the legal procedure
for satisfying claims against a mortgagor in default who has not redeemed the mortgage: satisfaction may be obtained from the proceeds of a forced sale of the property". (1) Bear in mind, this definition doesn't state that foreclosure is the end of the world. Obviously, foreclosure is an undesirable circumstance, but our plans and expectations don't always pan out. It's important to maximize the benefits of any situation. Just like life, real estate has ups and downs. It's important to uncover positive opportunities and outcomes whenever possible.
The Current Foreclosure Market
The third quarter of 2008 downturn in the real estate market has created a struggle for many homeowners across the country. In the article "Foreclosures dominate homes sales" published February 3, 2009 on CNNMoney.com, staff writer Les Christie discusses a report from Zillow.com that announced almost "20% of the nation's home sales in 2008 were bank repossessed properties." "Another 11% were short sales, in which homeowners owed more in mortgage debt then their homes were worth," the article continues. "More value [was] wiped out in the fourth quarter of 2008 than was eliminated in all of 2007," states Zillow's VP in charge of data and analytics, Stan Humphries.
In the third quarter of 2009 real estate foreclosures hit a record high. According to an October 15, 2009 report from RealtyTrac.com, one of the largest online marketplaces featuring foreclosed properties, the number of foreclosed filings increased by 5% from the second quarter of 2009 to the third quarter 2009. The third quarter of 2009 shows "an increase of nearly 23 percent from Q3 2008."
Debunking the Myths of Foreclosure
Myth 1. Foreclosure has no upside.
Foreclosure allows some buyers to purchase a home they may not have been able to otherwise. Investors can also often find foreclosed properties to repair, renovate or maintain for affordable prices. Foreclosure is a difficult experience for any homeowner but it can create an opportunity for some buyers.
Myth 2. The previous owner of the foreclosed property is still responsible for repairs and home inspection.
The previous homeowner is not responsible for any repairs or upgrades to the home once the bank has foreclosed on a property. It must be purchased "as is". Ask your real estate agent for a referral to a trustworthy, experienced home inspector who will thoroughly inspect the property and all of the home's systems.
Myth 3. If you're searching for a cheap home, buying foreclosed property is a great strategy.
Homebuyers or investors interested in purchasing foreclosures must be patient and confident. Investors need to ask the right questions and should have experience buying and selling since it is essential to accurately estimate the cost of repair and maintenance.
The Relationship Between Foreclosure and Real Estate Investment
All in all, foreclosure can create real estate opportunities for homebuyers. Many real estate investors understand the perks of currently making a long-term real estate investment and, when they have funds, purchase foreclosed properties in cash. These investors realize that over the next few years as the job market bounces back the housing market will follow.
Choose a Real Estate Agent with Experience and Expertise
Whether you are looking to buy your first home or you are a savvy investor, if a foreclosed property interests you be sure and speak with a knowledgeable real estate broker that knows what is involved in the purchase of repossessed properties. The support of a trained real estate professional ensures your real estate transaction will go smoothly and end successfully.
Real Estate Resources:
(1) http://www.yourdictionary.com/foreclosure Webster's New World College Dictionary Copyright 2009 by Wiley Publishing, Inc., Cleveland, Ohio. Used by arrangement with John Wiley & Sons, Inc.
(2)http://money.cnn.com/2009/02/03/real_estate/foreclosures_dominate_housing_market/index.htm
(3) http://www.realtytrac.com/foreclosure/foreclosure-rates.html
by: Nora Hall
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